The Next Wave of Canadian E-commerce: Super-apps and Sustainability

After depressed travel ever since the COVID-19 pandemic, we are now seeing demand surge back among Canadian travellers. While prices remain high and inflation puts pressure on people’s wallets, consumers continue to prioritize experiences over other categories. In fact, results from Hopper’s 2023 Travel Outlook Report show that 96% of Hopper users, who are predominantly Gen Z and millennial travellers, claim they plan to take at least one trip in 2023. This means that Canadian travel brands have a huge opportunity to revamp the travel experience in a way that leverages modern technology and mindsets to capture more customer spending.

A New Generation of E-commerce

Where Canadian — and frankly, all North American travel — lags behind, is in how it is marketing and merchandising travel to younger generations. Millennial and Gen Z travellers are getting older and obtaining more disposable income; they were also the first to start travelling again after the pandemic. These young travellers grew up with their phones and turn to apps like TikTok to find new information — nearly half of Gen Z is using TikTok and Instagram for search instead of Google. Traditional marketing techniques, like Google AdWords, will not resonate and capture marketing share as they once did.

“83% of Gen Z consumers do their shopping on social media.”

Here are some numbers from a Sensor Tower Report to put this in context: Gen Z spends 24 to 48 hours per month on TikTok alone — that’s about 5% of all awake time. Nearly 60% of TikTok users are from Gen Z and TikTok users spend an average of 95 minutes per day on the platform. This is more than four times the average duration spent on Snapchat (21 minutes), over three times the time spent on Twitter (29 minutes) and nearly twice as much as Facebook (49 minutes) and Instagram (51 minutes). Further, and especially notable for the travel industry, 83% of Gen Z consumers do their shopping on social media (source: Hootsuite Digital Trends Report). Travel companies have been slow to innovate for younger generations, leaving a gap for a comprehensive travel marketplace that relies on social commerce and gamification.

Looking internationally, we can find inspiration from more mobile-centric countries in Asia. A super-app is defined as “an application that provides end users (customers, partners or employees) with a set of core features plus access to independently created mini apps. The super-app is built as a platform to deliver a mini apps ecosystem that users can choose from to activate for consistent and personalized app experiences.” Some of the world’s most successful super-apps put a strong emphasis on social commerce, gamification and digital wallets. Social commerce, in particular, offers a new way for brands to activate their own user base. Leveraging features like referrals and share-to-earn, the goal is to get users to launch the app, engage with content and share with friends, in an effort to increase downloads and grow active users.

While new to Canada, the concept of a super-app has been well-tested in Asia and is widely adopted across generations. Asian users interact with their phones unlike many of their American counterparts (particularly older generations) – they start on social media and then go directly to the app.

Search is almost obsolete. Pinduoduo, WeChat and Alibaba are the best-known examples of dominating in China, though Line, Shopee, Grab, Mercado Libre, Rappi and PayTM are all dominant in their respective countries as well. They are known for having products across a wide range of use cases. WeChat, for example, allows for everything from ordering food and booking flights to scheduling a doctor’s appointment.

“Amazon has shown that category-specific super-apps have legs in North America by creating what is arguably a web equivalent of a super-app in e-commerce.”

Super-apps may be a new concept for travel in the West, but not for broader categories of commerce. Amazon has shown that category-specific super-apps have legs in North America by creating what is arguably a web equivalent of a super-app in e-commerce. Similar to how super-apps leverage their advantage in payments, Amazon has leveraged their advantage in logistics to aggressively expand. Further, Elon Musk has been vocal about super-apps, recently tweeting that his purchase of Twitter “is an accelerant to creating X, the everything app.”

“The industry is just beginning to understand how Millennial and Gen Z travellers behave around travel and savings in a mobile environment, meaning there is nothing but opportunity ahead.”

The concept of a true category-specific super app in the West is a thesis that Hopper and other brands are testing. Although still in its early stages, since launching social commerce features, the open rate for the Hopper app is two times higher among people engaging with the social-commerce content, equating to people launching the app multiple times a week. During the recent Travel Deal Tuesday shopping holiday, 100,000 users shared the sale using our share feature to earn raffle tickets and 10,000 users bought raffle tickets for the chance to earn prizes and travel credit. It is important to note that this became a brand new revenue stream for the travel company — 10,000 users spent money on something that was not for travel, even when there were other free ways to buy or earn raffle tickets. The industry is just beginning to understand how Millennial and Gen Z travellers behave around travel and savings in a mobile environment, meaning there is nothing but opportunity ahead.

The Power of Sustainable Travel

The other element appealing to younger travellers in the travel industry, which indicates an opportunity for Canadian brands, is sustainability. COVID-19 was a temporal crisis for the travel industry. However, the climate crisis is the greater existential threat facing our country and the world at large, and has specific implications for the travel industry. Millennial and Gen Z travellers, who will be the most impacted by the effects of climate change, care more about sustainability and use their purchasing power accordingly. A survey from First Insight found that the vast majority of Generation Z shoppers prefer to buy sustainable brands, further willing to spend 10% more on sustainable products.

We must do better with the environment and we should not put the onus on the consumer. I have previously called and will continue to call on all travel CEOs to offset their carbon impact on their profit and loss statements. At Hopper, through our program Hopper Trees, we plant two trees for every booking made on the Hopper app. Hopper donates trees directly to our partner, Eden Reforestation Projects, which has planting locations all over the world. Hopper’s planting sites are located in Kenya, Madagascar and Mozambique. While this alone is not enough, it is a start and the rest of the industry must join us in pushing this issue to the forefront.

“Understanding the generational differences of younger travellers, their shopping habits, priorities and expectations is crucial.”

The travel industry is at a pivotal time right now as it revives after the black swan event that was COVID-19. Simply put, web-focused e-commerce will not work in an app-dominated future.

Understanding the generational differences of younger travellers, their shopping habits, priorities and expectations is crucial as we look forward and build the travel brands of tomorrow. Relying on traditional marketing tactics will ensure that Canadian travel falls behind the global pace of innovation, limiting our market cap and growth trajectory. Furthermore, ignoring the climate impact of our industry will have grave implications beyond just the economy.